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Automotive News is reporting that Nissan Motor Co. will stop selling the Altima Hybrid, the only hybrid model currently offered in the Nissan brand’s lineup, by the end of the 2011 model year. As that car uses technology under license from rival Toyota, and Nissan has just launched its own in-house-developed hybrid tech in the Infiniti M hybrid, the end of the Altima hybrid could make way for future hybrid models from the automaker.

Since it was introduced in 2007, the Altima Hybrid has sold only about 35,000 units total – partly due to the fact that the car is only sold in the seven states that adopted California’s stricter emission guidelines. The hybrid system that debuted in the 2012 Infiniti M Hybrid uses lithium-ion batteries, as opposed to NiMH batteries in Toyota’s Hybrid Synergy Drive system, and was developed in-house at Nissan. The development of this new system could lead to a Nissan model that will sell in higher volumes than the Altima Hybrid.

While Nissan won’t say exactly what it has in store for its future hybrid models, the automaker, under the command of CEO Carlos Ghosn, has made clear its intentions of becoming a leading seller of electric vehicles. “We’re going heavily into electric vehicles right now,” said Nissan product spokesman John Schilling, referring to the recently launched Nissan Leaf EV. “But we are moving into other power technologies for the future, including hybrid.”

Talking about other possible applications for the new hybrid system in the Infiniti M Hybrid, Director of Product Planning at Nissan North America Mark Perry said, “We’re going to cascade it through where it makes sense.”

As Nissan is investing $1.6 billion to build a lithium-ion battery plant in Smyrna, TN, also the proposed site for Leaf production by late 2012, the case for more lithium-ion-based hybrids in the future is made stronger. The plant will have the capacity to produce 200,000 battery modules a year – or just about 50,000 more batteries than it can build Leafs for.

Although the current Altima Hybrid will get the axe, you can count on another hybrid model to fill the gap it leaves in due course.